Birth control prices rise as companies end discounts

Millions of college students are suddenly facing sharply higher prices for birth control, prompting concerns among health officials that some will shift to less preferred contraceptives or stop using them altogether.

Prices for oral contraceptives, or birth control pills, are doubling and tripling at student health centers, the result of a complex change in the Medicaid rebate law that essentially ends an incentive for drug companies to provide deep discounts to colleges.

At some schools, women could see prices rise several hundred dollars per year.

About 39 percent of undergraduate women use oral contraceptives, according to an estimate by the American College Health Association based on survey data.

The change is the result of a chain reaction started by a 2005 deficit-reduction bill that focused on Medicaid, the main federal health insurance program for the poor. College health officials say they had little idea the bill would affect them.

Before the change, pharmaceutical companies typically sold drugs at deep discounts to a range of health care providers, including colleges. With contraceptives, one motivation was attracting customers who would stay with their products for years.

Another reason the discounts made business sense was that they didn't count against the drug makers in a formula calculating rebates they owed states to participate in Medicaid.

But in its 2005 bill - which went into effect in January - Congress changed that. Now the discounts to colleges mean drug manufacturers have to pay more to participate in Medicaid.

The result: Fewer companies are willing to offer discounts.

The price increases will "definitely have an effect on students," said Lindsay Hicks, a Sexual Health Awareness Peer Educator at Kansas State University, where she said prices were rising from about $10 to about $30 per month.